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NAHB Housing Market Index Unchanged in September

September 20, 2018 by Kay Monigold

NAHB Housing Market Index Unchanged in SeptemberHome builder confidence in housing market conditions stayed flat in September. The National Association of Home Builders Housing Market Index reported an index reading of 67, which matched expectations and NAHB’s housing market reading for August. Analysts cited recent tariffs on building materials as a significant cause of easing builder confidence.

While NAHB called September’s reading “solid” at 67, the reading was one full point lower than the average reading for 2017 and equaled the lowest builder confidence reading in 2018 to date. Readings over 50 in the Housing Market Index indicate that more builders than fewer are confident in housing market conditions.  

Components of the Housing Market Index were mixed as builder confidence in current market conditions rose one point to 74. Builder confidence in market conditions for the next six months rose two points to a reading of 74. Builder confidence in buyer traffic in new housing developments was unchanged with a reading of 49.

Buyer traffic readings frequently fall below the benchmark reading of 50, so a reading of 49 indicates builders aren’t concerned about buyer interest in new homes.

Home Building Viewed As Cure For Housing Shortages, But Buyers Face Challenges

Housing industry leaders, real estate pros and mortgage lenders continued to look to builders for a solution to severe housing shortages in some areas. Rapidly rising home prices driven by high demand, few choices for buyers and aren’t likely to ease until inventories of available homes increase. Recently rising mortgage rates added to pressures on first-time and moderate-income home buyers.

NAHB Chief Economist Rob Dietz said that trade skirmishes and “burdensome regulations” also contributed to rising home prices. Real estate pros said that local market conditions affected market areas affected by natural disasters including severe red tide algae blooms in Florida and wildfires in Oregon and California. Home sales typically slow in August, but the combination of low inventories of homes coupled with rising prices and natural disasters resulted in lower than expected home sales in August.

Buyer fatigue was cited as a driving factor in slowing home sales as rapidly rising prices and few available homes took a toll on buyer interest. As the school year approached buyers were backing off instead of continuing to compete with cash buyers and bidding wars.

It is commonplace for markets to shift and for trends to change. Your trusted mortgage professional is ready to help you find your best financing options for today’s real estate market.

Filed Under: Real Estate Tagged With: Builder Confidence, Housing Market, Market Conditions

Big Second Quarter GDP Numbers Impact Housing Market

August 10, 2018 by Kay Monigold

Big Second Quarter GDP Numbers Impact Housing MarketPositive economic growth numbers are always cause for celebration and the second quarter GDP just went vertical. After nearly four years of sub-par growth, the real GDP hit 4.1 percent in the second quarter.

While that economic news has everyday Americans excited that we may be entering a new age of prosperity, drawing a concrete link to the real estate market may be difficult. But by looking long and hard at this uptick and its potential impact on housing, you may get a better idea about buying, selling or standing pat on residential and commercial property.

GDP Report Points To Demand

Among the positive measures from the recent economic report, consumption enjoyed a positive increase. The first quarter numbers were disappointingly sluggish in this area at a modest 0.5 percent. The second quarter took off like a rocket, by comparison, at 2.25 percent.  

Although that figure shows an upwardly mobile economy, some experts are calling it discouraging given the extraordinary consumer confidence that has risen to record highs of more than 101.0 since November 2017. This opinion begs the question: why are economy gurus disappointed?

The first part of that answer has to do with the implementation of the Tax Cuts and Jobs Act that is putting more money in American paychecks and rolled back income tax liability. Many economists forecast that this personal wealth growth would turn into solid consumption. While working families have enjoyed a breather in terms of scratching from paycheck to paycheck, home purchases have not gone through the roof.

Home availability remains relatively low. With Millennials scooping up many of the starter-home listings and Baby Boomers downsizing, a significant housing shortfall exists. If you have ever heard the term “seller’s market,” this is it.

Inventory Shortage Means Buy Quickly

There are always naysayers that point to lower than expected consumption and claim the economy is weak. The facts in the GDP report clearly dispute any such ideas.

Business investment spiked to a powerful 11.5 percent and then 7.3 percent in the first two quarters. Fixed business investment is on fire based on deregulation, soaring profits and confidence.

That’s why real estate resources are saying that the only thing holding the market back is inventory. Home sale data is not keeping pace with other sectors of the economy because there simply is not enough inventory to keep up with demand. For first-time buyers, this means get prequalified and act swiftly if you find a dream home. It won’t stay on the market long.

Prospective homebuyers may be relieved to know that positive construction indicators are trending. New homes are expected to improve the inventory shortage heading into 2019. Still, demand is likely to stay ahead of inventory.

Be sure to contact your trusted mortgage professional to help you get your financing pre-approved so that you are ready to make an offer quickly.

Filed Under: Real Estate Tagged With: Home Sales, Housing Market, Real Estate

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Kay MonigoldKay Monigold
Owner/Mortgage Broker/Residential Mortgage Loan Originator
NMLS#1086176

Ron MartinRon Martin
Residential Mortgage Loan Originator

NMLS#316821

Steven LoweSteven P Lowe, Sr
Residential Mortgage Loan Originator
NMLS #1085638

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